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The Best Time to Control Cost is Before It’s Incurred

April 24, 2012, by Mike Antich - Also by this author

Each fleet has its own “DNA” comprised of the procedures and regulations that are codified in its corporate fleet policy. It is these procedures and regulations that determine the type of fleet each of us operate and its characteristics. Fleet policy is crucial and should be part of each company’s cost-control strategy. By establishing the fleet policies up-front for expense control and by making a concerted effort to ensure they are uppermost in the minds of your drivers, you will reap substantial cost savings. The best time to control cost is before it occurs, and the way to do this is by establishing policies and procedures that inhibit unnecessary spending. Fleet policy has wide-ranging cost-containment ramifications. For instance, defining who is eligible for a company vehicle, in effect, determines the size of the fleet.

As a cost-control strategy, the fleet manager must have the authority and backing of upper management to address a driver’s inability to operate and maintain an assigned vehicle. This authority allows the fleet manager to address violations of fleet policy without approval or direction from upper management.

Communicating Expectations

The best managed fleets tend to be those that operate under a well-defined fleet policy that is adhered to by drivers and consistently enforced by management. When developing or re-evaluating fleet policy, it is important to solicit the participation of all affected departments, such as sales, HR, procurement/sourcing, and financial/tax, along with all vehicle user groups. By involving them in the decision-making process, you will increase the likelihood of buy-in and support of fleet policies. Make fleet policy easily accessible to drivers and managers by posting it on the company Intranet. Set aside time at company meetings to make fleet policy presentations to drivers and managers. Also, conduct teleconferences with drivers who work at regional offices. Use these meetings to re-emphasize the importance of policy and cost control. Your fleet policy should be a living document that is updated annually. As changes occur within your company, revise procedures to reflect these changes. Likewise, eliminate policies that have become outdated. What was right yesterday may not be right today. Also, as part of your annual fleet policy review, survey your drivers to give them an opportunity to express their opinions or dissatisfaction about the fleet policies that govern them.

No policy can anticipate all possibilities, but consistency in dealing with all the drivers assigned company vehicles at different locations is essential. It is crucial for management to give the fleet manager appropriate authority to address non-compliance by drivers. This will go a long way toward reducing compliance issues.

Each driver should know the rules governing the use of a company vehicle. Not only should drivers be aware of these rules, but they must also understand what actions will be taken for non-compliance. As the fleet manager, it is your responsibility to communicate fleet policy to drivers. However, just because you implement a fleet policy doesn’t mean it is being followed. Once a policy is established, you need to ensure these policies are truly communicated to your drivers. A common problem is that the fleet manager communicates policy to the drivers’ managers, but the word often doesn’t get filtered down to the individual drivers. To avoid this problem, many companies teach policies and procedures regarding company vehicles as part of the new-employee orientation. Another strategy is to send periodic e-mails or voicemail messages to drivers on specific fleet policy reminders; in particular, on those issues that have higher-than-normal incidents. Also, e-mail copy supervisors who have drivers that are repeatedly not within policy. When important fleet policy changes occur, if possible, communicate these changes by using paycheck stuffers.

The Danger of Policy Exceptions

It is extremely important that the rules governing the company vehicle privilege be uniformly enforced for all employees. You should not set precedent by allowing exceptions, even if it involves a star salesperson or senior corporate officer. If your company becomes embroiled in litigation involving a company vehicle because of a problem driver, these exceptions and prior policy precedents will be used against you. There should be no exceptions to your company vehicle usage policies. When dealing with driver-related problems, the last thing you want to do is create a new problem in the course of resolving one. The surest way to do so is to make an exception to fleet policy. If litigation occurs, the first thing an attorney is going to ask is to review your company vehicle policy. With this in mind, it is critical that a fleet manager makes sure all drivers uniformly adhere to company fleet policy. This bears repeating: There should be no exceptions to your company vehicle policies. This simple rule will make your job a lot easier and may save you from a lot of potential grief.

Let me know what you think.


  1. 1. Steve Franz [ April 27, 2012 @ 05:27AM ]

    Excellent article Mike. I remind my drivers the vehicle they are driving is "My Vehicle, on loan to them". Treat My vehicle correctly. I hate to use the observation, "Treat it like it was your own." I see how some (very few) treat their own vehicles. While I adhere to established policy, our HR department will all to often step in and make exception. Us Fleet Managers have to pick and choose our battles. I love winning a skirmish, but chringe at the outcome of the battle....

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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